What actions can the Project Manager take to ensure that a defect/damaged item on site is repaired as soon as possible? Is payment retained from the Contractor in the amount due?
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By ‘damaged item’ it sounds as if it isn’t yet incorporated into the works. Under priced based options A & B, if the item wasn’t covered by an activity or BoQ rate, you would not be paying for it until it had been incorporated into the works. Whether you would have to pay for it would depend upon whether it was a type of Defect mentioned in the definition of Price for Work Done to Date e.g. prevented following work.
For the cost-based options C to E, you pretty much would have to pay for it as Defined Cost unless there was a good reason for it to be a Disallowed Cost. No obvious ones spring to mind.
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